In June 1985, Miyazaki, Takahata, Tokuma and Suzuki founded the animation

production company Studio Ghibli, with funding from Tokuma Shoten. Studio Ghibli's
first film, Laputa: Castle in the Sky (1986), employed the same production crew of
Nausicaä. Miyazaki's designs for the film's setting were inspired by Greek
architecture and "European urbanistic templates".[83] Some of the architecture in
the film was also inspired by a Welsh mining town; Miyazaki witnessed the mining
strike upon his first visit to Wales in 1984, and admired the miners' dedication to
their work and community.[84] Laputa was released on August 2, 1986. It was the
highest-grossing animation film of the year in Japan.[83] Miyazaki's following
film, My Neighbor Totoro, was released alongside Takahata's Grave of the Fireflies
in April 1988 to ensure Studio Ghibli's financial status. The simultaneous
production was chaotic for the artists, as they switched between projects.[85][k]
My Neighbor Totoro features the theme of the relationship between the environment
and humanity—a contrast to Nausicaä, which emphasises technology's negative effect
on nature.[86] While the film received critical acclaim, it was commercially
unsuccessful at the box office. However, merchandising was successful, and the film
was labelled as a cult classic.[87][88]

In 1987, Studio Ghibli acquired the rights to create a film adaptation of Eiko
Kadono's novel Kiki's Delivery Service. Miyazaki's work on My Neighbor Totoro
prevented him from directing the adaptation; Sunao Katabuchi was chosen as
director, and Nobuyuki Isshiki was hired as script writer. Miyazaki's
dissatisfaction of Isshiki's first draft led him to make changes to the project,
ultimately taking the role of director. Kadono was unhappy with the differences
between the book and the screenplay. Miyazaki and Suzuki visited Kadono and invited
her to the studio; she allowed the project to continue.[89] The film was originally
intended to be a 60-minute special, but expanded into a feature film after Miyazaki
completed the storyboards and screenplay.[90] Kiki's Delivery Service premiered on
July 29, 1989. It earned ¥2.15 billion at the box office,[91] and was the highest-
grossing film in Japan in 1989.[92]

From March to May 1989, Miyazaki's manga Hikōtei Jidai was published in the
magazine Model Graphix.[93] Miyazaki began production on a 45-minute in-flight film
for Japan Airlines based on the manga; Suzuki ultimately extended the film into the
feature-length film, titled Porco Rosso, as expectations grew. Due to the end of
production on Takahata's Only Yesterday (1991), Miyazaki initially managed the
production of Porco Rosso independently.[94] The outbreak of the Yugoslav Wars in
1991 affected Miyazaki, prompting a more sombre tone for the film;[95] Miyazaki
would later refer to the film as "foolish", as its mature tones were unsuitable for
children.[96] The film featured anti-war themes, which Miyazaki would later
revisit.[97][l] The airline remained a major investor in the film, resulting in its
initial premiere as an in-flight film, prior to its theatrical release on July 18,
1992.[95] The film was critically and commercially successful,[m] remaining the
highest-grossing animated film in Japan for several years.[94][n]

Studio Ghibli set up its headquarters in Koganei, Tokyo in August 1992.[99] In

November 1992, two television spots directed by Miyazaki were broadcast by Nippon
Television Network (NTV): Sora Iro no Tane, a 90-second spot loosely based on the
illustrated story Sora Iro no Tane by Rieko Nakagawa and Yuriko Omura, and
commissioned to celebrate NTV's fortieth anniversary;[100] and Nandarou, aired as
one 15-second and four 5-second spots, centered on an undefinable creature which
ultimately became NTV's mascot.[101] Miyazaki designed the storyboards and wrote
the screenplay for Whisper of the Heart (1995), directed by Yoshifumi Kondō